The brightest spot in terms of growth observed from the national accounts released by the National Bureau of Statistics (NBS) for Q3 2016 was agriculture, which expanded by 4.5% y/y.
However, within the sector, fisheries contracted by -0.3% y/y (see chart), and accounted for only 2% of agricultural GDP in the quarter.
Based on data from the federal ministry of agriculture and rural development, Nigeria’s total annual fish demand is estimated at 3.3 million metric tonnes (mmt), only 33% of which is supplied domestically. The deficit is imported, resulting in an estimated annual spend of US$700m.
This supply gap should encourage a shift from subsistence to commercial fish farming. Artisanal fish farming is still dominant in Nigeria. The most recent data from the NBS show that artisanal fish production accounted for around 68% of the 1.02 mmt of fish produced in 2015.
Meanwhile, commercial trawling accounted for just 1.5% in the same year.
Given the FGN’s import substitution strategy, the fisheries segment is set to expand. However, the high costs associated with fish farming (particularly due to cost of fish feeds) pose a major challenge.
Industry sources suggest that fish feed accounts for c.75% of the total cost of production. Meanwhile, we gather that 5% VAT, the standard rate, is charged on locally produced fish feeds.
Considering that access to credit is a consistent obstacle, a sustainable intervention programme should assist in deepening the pockets of local fish farming businesses.
An example is the CBN’s Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) which recently announced its plans to launch a US$300m agribusiness loan project.